Jessica Gorst-Williams gets Santander to waive £12,000 of early repayment
charges for a reader after the bank admitted to a processing error.

I feel my mortgage provider Santander has forced me away as a customer and hence into paying the £12,000 as set out in the early repayment clause of my mortgage with them. In 2005 I took out a 25-year interest-only mortgage with Bradford & Bingley. This mortgage was for £330,000. I put down a £40,000 deposit.

In 2007 I remortgaged, transferring the £330,000 to a five-year fixed-rate mortgage on a repayment basis with Santander, which had absorbed Bradford & Bingley. In 2012 I remortgaged once more, again with no concerns from Santander, with an outstanding balance of £261,000. This was again on a five-year fixed rate.

At this point I was aware that I might be moving within five years and of the £12,000 break clause. However, I was advised that Santander would absorb this cost if I took the mortgage on the new property with them.

Jame Hanlon, south of England

You were intending to sell your flat and buy a house. You rang Santander and it was asserted there would be no problems with Santander lending £429,000 for the property you had found.

The offer was accepted and your wife and yourself attended a long interview at a Santander branch where you provided all the required information about your company accounts including payslips, budget planners etc.

You are an IT consultant working through your own limited company, of which you are the only shareholder. Your company accounts demonstrate that you have averaged about £95,000 a year net profit for nine years. You earn a small salary and receive your “income” through dividends. Your wife works elsewhere.

You were led to believe that you would be offered a mortgage within 48 hours, but throughout the next three weeks you were asked to provide more and more information about your company accounts. Your Santander contact blamed its underwriter for asking additional questions.

After more than three weeks of chasing, Santander finally offered to lend £239,000 which was not even enough to cover the outstanding mortgage you had on the present property.

You had to change mortgage provider and now have a mortgage facility with this completely different lender. However, you were faced with taking the hit of Santander’s £12,000 early repayment charge.

I spoke to Santander which, having looked into this, now said an error occurred during the processing of your remortgage application with it and this is what led to your request being incorrectly declined. In the light of the error, Santander, entirely as a result of my involvement, is waiving the full £12,000 early repayment charge and has sent you a hamper for the inconvenience caused.

I asked for an ex-gratia payment as well given the enormous trouble you have been put to. It has sent you £150.

You say Santander failed to understand how a single-shareholding company worked. The bank has assured me that feedback is going to the relevant people.